Interact Climate Change Facility secures US$60m from FMO, OeEB and Swedfund

AFRICAFMO, OeEB and Swedfund have agreed to invest €50 million (US$60.38m) to the Interact Climate Change Facility (ICCF), a co-financing facility providing financing to climate-related investments in emerging markets.

FMO, a Dutch development bank, will commit €20 million (US$24.15m) while OeEB, the Development Bank of Austria, will provide €15 million (US$18.11m) and Swedfund, a Sweden’s Development Finance Institution, will commit €15 milion (US$18.11m).

ICCF offers co-financing for its funders for senior loans, mezzanine debt and guarantees with a maximum tenor of 18 years. The funding capacity of ICCF is provided by AFD, EIB and 11 EDFI members.

“Thanks to this replenishment, European DFIs are strengthening European financial cooperation for climate action. Investing in green energy is essential for human and economic development,” said Peter Thimme, DEG, Chair of the Board of Directors of ICCF.

“With ICCF having now €480 million (US$579.68m) available funding for additional projects, European DFIs are committed to scale up their transformative role to fight climate change in emerging markets.”

“Increasing access to clean, reliable and affordable energy which enables economic development and helps fight climate change is one of our core strategic goals.”

Sabine Gaber – Executive Board Member, OeEB

By closing the climate finance gap in emerging markets, European Development Finance Institutions (DFI) are determined to boost these countries’ resilience, generate jobs and accelerate their inclusive and sustainable economic growth.

“The continued efforts under the ICCF climate change facility play an important role in Team Europe’s investment in private sector projects that scale up climate change mitigation and energy access,” said Søren Peter Andreasen, CEO of EDFI.

ICCF was first launched in 2011 to support renewable energy and energy efficiency projects in developing countries.

In 2020, the European Investment Bank (EIB), Agence Française de Développement Group (AFD) and ten EDFI members, including OeEB, announced the extension of the ICCF mandate until 2022.

“Increasing access to clean, reliable and affordable energy which enables economic development and helps fight climate change is one of our core strategic goals,” said Sabine Gaber, Member of OeEB’s Executive Board.

Since its inception, ICCF has supported 33 projects across 18 countries for €502 million (US$606.25).

Half of the projects financed are supporting wind power solutions (e.g. Lake Turkana in Kenya), a quarter are focused on solar power (e.g. MECER in Honduras) and the rest supporting other renewable energies (geothermal, energy efficiency and hydropower).

“We are proud to be part of this joint action to fight climate change in emerging markets. The fund has proven to be efficient and well-functioning, and an important vehicle for climate financing. As an important bonus it strengthens the cooperation and knowledge sharing among the European DFIs,” added Linda Broekhuizen, CEO a.i. of FMO.

“Swedfund’s focus on renewable energy in developing countries is more important than ever and also in line with the global ‘build back better’ approach. This cooperation is not only strategic, but also very hands-on. ICCF has been an important facility for collaboration amongst DFIs since its inception with a relevance that has only increased during the pandemic,” said Maria Håkansson, CEO of Swedfund.

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